PC.Com Soapbox – May 2011 – Izzinet troubles

Back in May 2011, I had my first article published in PC.com magazine in Malaysia. I can’t quite remember the title since the then editor, Catherine Yong, helped me with that and I’m not sure I have the physical magazine with me. 

Here’s my submission (I’ve added subtitles to make them more suitable for online reading):

izzinetBack in 2007, iZZinet was a new player on the ISP block. You could hardly walk through Low Yat Plaza or Digital Mall PJ without passing by an iZZinet kiosk or reseller. I was quite intrigued by the promise of their iBurst technology which according to iZZinet’s then director of sales and marketing Dennis Chan, gave “leading-edge, superior mobility, reliable internet connectivity and great speed at the most competitive prices”.

After spending several unsatisfactory years stuck with Streamyx, I was absolutely ready for ‘reliable internet connectivity and great speed at the most competitive prices’. And since iBurst technology was based on RF signals, it’s unaffected by changes in weather (unlike a certain other company where you’d be lucky to get a stable connection during Malaysia’s frequent thunderstorms). The provision of a money-back guarantee extending up to six months of use provided me with a safety net if I wasn’t happy with the service (more on that later).

Roll forward the clock to 2011 and the picture is completely different for iZZinet. They officially ceased business in March 2011 leaving many disgruntled users (like me) struggling. You see, we had made a very big mistake of signing up for an auto-debit arrangement. It sounded so good too. Just sign a form and our credit card gets charged each time our account needed renewal. Which was fine until iZZinet started showing signs of having major problems.


Troubling signs

It was extremely difficult to get in touch with customer services and when you did get through, you were met with false promises that your auto-debit arrangement would be cancelled. Even sending a cancellation request to the bank did not work since they had no authority to stop payments. Some of us were forced to cancel our credit cards and go through the hassle of getting new ones.

So what went wrong? Cheap prices coupled with promising technology and relatively fast wireless broadband should have been a winning formula. iZZinet gave the best bang for your ringgit that the competition couldn’t match. Secruoser, a Lowyat.NET forum user said, “The days of unlimited Internet usage on a mobile connection with a decent speed is gone together with iZZinet.”

The writing on the wall

What may have been a catalyst for iZZinet’s downfall was a statutory notice in 2008 by Silver Ridge Holdings Holdings Berhad claiming RM1,555,322.22. Could financial mismanagement be behind it all? Without further documentation, it could be hard to prove that theory but Silver Ridge’s litigation case certainly didn’t help iZZinet’s business. Both parties eventually entered into a settlement agreement to the tune of RM1.2m from 12 post-dated cheques commencing 31 July 2010 (the balance of the claim still remained in dispute though).

What about the competitive environment at that time? DiGi, Maxis, Celcom and U Mobile’s wireless broadband services were still immature and P1’s WiMAX was over a year from launch. Even IZZinet’s then marketing manager Keith Leong commented that they had no direct competitor. I suspect iZZinet missed the coming surge of smart phones in the marketplace and the advent of tethering. The ability to tether smart phones and use existing mobile data plans on PCs was an attractive one for consumers, especially to those who liked the relative neatness of all-in-one solutions.

As I look upon my new credit card (obtained after some lengthy discussions with my bank since I’m based overseas) and with the irritation-factor of settling my auto-debit arrangement still fresh in my mind, I remember another iZZinet promise that turned out false. Their money back guarantee turned out to have several conditions attached to it. Basically, it depreciated from a full refund before seven days of use (provided you didn’t use more than 3MB during that time) to 50 percent before six months and you’re still subject to a RM180 ‘administrative fee’.

A false dawn for 4G

Old izzinet adThe 4G moniker that iZZinet so proudly displayed in their marketing materials is also laughable considering that the standards weren’t even finalised at that time. Today, WiMAX services from P1 and YES are closest you’d get to experiencing true 4G in Malaysia (despite what they put in their marketing materials, it ain’t 4G until they start showing speeds at least close to 100Mbps). When Malaysia graduates from 3G to 4G standards as Information, Communication and Culture Minister Datuk Seri Dr Rais Yatim announced it would at the end of last year and LTE-Advanced truly takes off, then consumers can expect to experience true 4G.

I’m thankful for the Lowyat.NET forum where I was able to keep tabs on the situation back home and learn how to stop iZZinet from leaching my money. Other users had horror stories to tell too – Tionce, a Lowyat.NET forum user and former iZZinet subscriber said,

“I made one lump sum payment RM66 x 12 for renewal. Subscription was supposed good until Sep/Oct 2011, but now I have to bear this 6/7-month loss. I do not know where to get help from, already tried calling Mobif (the holding company), insolvency and Wilson (an iZZinet customer service rep). This is such a pain because it seems to me that they ran away without any footprints.”

A cautionary tale

On the basis of my experience with iZZinet, I urge all readers to avoid auto-debits with any but the most trustworthy of companies. The National Consumer Complaints Centre (NCCC) had this advice to give: “The banks will never listen to its customers to stop any auto-debit charges from a merchant since the card holder has actually granted permission to the merchant. An auto-debit arrangement is a contract made between both parties. The bank is just a third party which provides credit facilities to the consumers.”

There is some recourse in the protection offered by The Consumer Protection Act 1999, Section 17, which covers future services contracts (which is what an auto-debit arrangement actually is) but according to the NCCC, recovering lost payments isn’t always a straightforward affair. Some companies make it difficult for you to get your money back.

Hopefully, the iZZinet débâcle will serve to make us all more cautious and informed consumers.


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